Industrial and competition law in India is best read as the record of a single reversal. For roughly four decades after Independence, the legal system decided who could produce, where, in what quantity and with whose money, and it made those decisions before production began, through licences, approvals and consents issued by the State. The settlement that replaced it asks a different question. It lets firms enter, invest and combine, and it intervenes afterwards when agreements, dominance or combinations damage competition in a market. India stopped asking permission and started asking effect. That sentence is the organising claim of this guide, and the statutes of the field fall into place once it is grasped: a family of entry-control laws built around the Industries (Development and Regulation) Act, 1951, a mixed experiment in the Monopolies and Restrictive Trade Practices Act, 1969, a conduct-control law in the Competition Act, 2002, and a set of facilitation statutes, the Special Economic Zones Act, 2005 and the Micro, Small and Medium Enterprises Development Act, 2006, which classify and benefit firms rather than control them.

The difference between the two regimes can be felt in the kind of question each asked of the same firm. Under the entry-control statutes, the State asked the producer: what do you propose to make, in what quantity, where, with whose capital, and are you already large enough that your growth should require a further sanction. The producer answered in a file, and the file was the decision. Under the conduct statute, the State asks the market: what does the agreement do to price, output and choice in this market, does the dominant firm’s behaviour exclude rivals rather than outperform them, and will the combination appreciably damage competition. The producer is no longer the petitioner; the market is the subject of inquiry, and the evidence is economic. One regime rationed the right to compete. The other protects the process of competition itself, and it protects it against private firms and State firms alike, as the sovereign functions section of this guide explains.

The reversal was neither quick nor complete, and a guide to the field has to hold both halves of that sentence. The entry-control statutes were dismantled between 1991 and 2009, mostly by executive notification and only later by repeal, and one of them, the Industries (Development and Regulation) Act, 1951 (Act 65 of 1951), was never repealed at all: it stands on the statute book with a licensing list shrunk to a handful of industries. The conduct statute took effect in stages between 2003 and 2011, and its merger-control chapter is itself a system of prior permission, extended by amendment in 2023 to transactions that size thresholds alone would have missed. Entry control also survives sectorally, because entry into telecommunications, banking, insurance and electricity is licensed or authorised under sector statutes, and those sector regulators share the field with the Competition Commission of India along a border that the courts have had to police. This guide maps the whole field at the level of the map: it identifies each statute, states what kind of control it exercises, records whether it is in force, and routes the reader to the companion guides that teach each instrument in depth. It is a legal account of statutes and institutions on a subject where economic policy is contested, so positions in the liberalisation debate are stated in the terms their proponents use, and no position in that debate is adopted here.

The constitutional device that made central industrial control possible

Industrial law in India begins with a puzzle in the Seventh Schedule. The Constitution distributes legislative power over industries in a way that looks, at first sight, like a State subject with two Union carve outs, and the whole architecture of central industrial legislation rests on how those carve outs were drafted. State List entry 24 reads “Industries subject to the provisions of entries 7 and 52 of List I”. Entry 7 of the Union List covers industries declared by Parliament by law to be necessary for the purpose of defence or for the prosecution of war. Entry 52 of the Union List covers “Industries, the control of which by the Union is declared by Parliament by law to be expedient in the public interest”. The drafting technique is unusual. Parliament does not take competence over an industry by listing the industry in the Union List. It acquires competence by declaring, inside an ordinary statute, that Union control of a described set of industries is expedient in the public interest. The declaration is the key that turns the lock, and until the declaration is made, industries remain with the States. The full text and history of the three Lists are treated in the guide to the Seventh Schedule lists, and the entries matter here because they explain why India’s central industrial statute takes the form it does.

Why did the Constitution leave industries with the States?

Industries were left with the States because the framers treated factories and production as matters of local administration, close to land, labour and public health, while reserving to the Union the industries that war, defence and national economic planning made central concerns, to be captured only by a declaration in a law.

The two Union entries are therefore exceptions with a condition attached: each operates only when Parliament speaks, by declaration in a law, for the industries it names. A State’s power over industries is the residuary position, real but defeasible, and it revives in full for any industry that no Union declaration has captured.

The Industries (Development and Regulation) Act, 1951 made the declaration. Section 2 of the Act declares that it is expedient in the public interest that the Union should take under its control the industries specified in the First Schedule to the Act. That single section did the constitutional work: every industry in the First Schedule passed, for the purposes of the Act, under Union control, and the Schedule was long, covering the commanding heights of manufacturing from iron and steel, heavy plant and machinery, shipbuilding and aircraft to fertilisers, cement, sugar, textiles and paper. The Concurrent List completes the device. Entry 33 of List III covers trade and commerce in, and the production, supply and distribution of, the products of any industry where the control of such industry by the Union is declared by Parliament by law to be expedient in the public interest, together with certain foodstuffs and raw materials. Entry 33 is what allowed the Centre to legislate on the supply, distribution and price of products of controlled industries, the power exercised through section 18G of the 1951 Act, and it is why control of an industry and control of its products travelled together in the licensing era. Entry 7 deserves its own sentence in this architecture, because defence industries stand on a different footing from the Entry 52 field: the Union’s competence over industries declared necessary for defence or the prosecution of war does not depend on a public interest declaration of the Entry 52 kind, and defence production was licensed under the 1951 Act from the start, administered as the most protected corner of the licensing system. The three entries together describe a graded design. Defence industries are the Union’s outright. Scheduled industries are the Union’s on declaration. All other industries are the States’, subject to Parliament’s general powers over inter-State trade, corporations and the concurrent subjects. Every later statute in this field can be located on that gradient, and the competition statute, notably, is not an industries law at all in this sense: it rests on Parliament’s competence over trade, commerce and corporations across the whole economy, which is one reason it could be written generally, for every market at once, where the licensing statutes had to proceed industry by industry, schedule by schedule.

Three consequences of this architecture run through everything that follows. First, central industrial control in India was always statute specific rather than general: the Centre controlled the industries a declaration captured, on the terms the capturing statute set, and no further. Second, the States never left the field. A factory needs land, water, power and local clearances, and State List entry 24 continues to ground State legislation for industries outside any declaration, so industrial entry in India has always been a two level affair even at the height of central licensing. Third, the declaration device explains the strange afterlife of the 1951 Act. The declaration device was a compromise between two constitutional impulses. The framers left factories with the States because production touches land, labour, water and public order, the everyday subjects of provincial administration, while giving the Union a way to capture the industries that national defence and national planning made central concerns. Entry 52 is therefore written as a conditional grant: the Union gets the industry only when Parliament, by law, declares Union control expedient in the public interest, and only for the industries the declaration names. The technique appears nowhere else in the distribution of legislative power in quite this form, and its peculiarity is the reason the entire central industrial edifice takes the shape of a single long statute with a schedule attached, rather than a series of industry specific Acts. Parliament did not nationalise industries one by one. It declared control over a scheduled field and built one regulatory machine for the whole field.

The First Schedule itself was a legislative choice with economic meaning. It listed the industries whose control the Union took, and section 2’s declaration was framed in its terms: it is expedient in the public interest that the Union should take under its control the industries specified in the First Schedule. Parliament amended the Schedule over the years, adding industries as the planned economy widened and, after the turn toward liberalisation, removing them. Because competence flowed from the declaration and the Schedule, shrinking central control required no constitutional amendment: the executive could notify industries out of the licensing net, and later governments could leave the Act in force while emptying most of its practical content. The Constitution supplied a valve, and after 1991 the valve was turned, repeatedly, in one direction.

Industrial and competition law in India as one field: the map

Read as one field, the statutes sort into three families according to the moment at which the law intervenes. Entry-control laws intervene before the firm acts: a licence under the Industries (Development and Regulation) Act, 1951 before a factory is built or expanded, prior governmental approval under the original scheme of the Monopolies and Restrictive Trade Practices Act, 1969 before a large undertaking expands, merges or is taken over, consent of the Controller of Capital Issues under the Capital Issues (Control) Act, 1947 before capital is raised from the public, and permission under the Foreign Exchange Regulation Act, 1973 before foreign equity crosses prescribed limits. Conduct-control law intervenes during or after the act: the Competition Act, 2002 prohibits agreements that cause an appreciable adverse effect on competition and prohibits abuse of a dominant position, and it tests both by their effects in a defined market rather than by the size or identity of the firm. Status and facilitation laws do neither: the Special Economic Zones Act, 2005 confers a territorial and fiscal status on approved zones and the units inside them, and the Micro, Small and Medium Enterprises Development Act, 2006 classifies enterprises by size and attaches benefits and payment discipline to the classification. The three families also answer to three theories of what the State is doing in an economy. Entry control treats the State as allocator: resources are scarce, the plan ranks their uses, and law is the ration book. Conduct control treats the State as referee: the game belongs to the players, law states the fouls, and the regulator intervenes when a foul is shown by its effect on the game. Facilitation treats the State as gardener: it cannot allocate everything and does not wish to, so it improves conditions for the classes of enterprise it wishes to see grow, by status, preference and protection against the strong. Indian industrial law has never held one theory at a time in pure form. The licensing era contained conduct elements, in the MRTP Commission and in price control; the conduct era contains an allocator’s pocket in merger control; and the facilitation statutes grew up inside the licensing era as the small scale reservation, long before they were codified in 2005 and 2006. The table that follows is the findable artifact of this guide, and it states the classification, the position in force, the regulator and the forum for each statute in one view.

Entry, conduct, status: the statutes of the field

Statute	Entry control	Conduct control	Status or benefits	Position in force	Regulator	Forum
Industries (Development and Regulation) Act, 1951	Yes	Limited	No	In force; licensing confined to a short notified list	Central Government, administered through the Department for Promotion of Industry and Internal Trade	Courts, on licence decisions and takeover orders
Monopolies and Restrictive Trade Practices Act, 1969	Yes, until 1991	Yes	No	Repealed with effect from 1 September 2009	MRTP Commission	MRTP Commission; transferred cases to the Competition Appellate Tribunal
Capital Issues (Control) Act, 1947	Yes, over issues of capital	No	No	Repealed in 1992	Controller of Capital Issues	Executive consent; courts on review
Foreign Exchange Regulation Act, 1973	Yes, over foreign equity and payments	Yes	No	Repealed and replaced by the Foreign Exchange Management Act, 1999	Reserve Bank of India and the Enforcement Directorate	Appellate Board under the Act; courts
Competition Act, 2002	Yes, for combinations	Yes	No	In force, as amended in 2023	Competition Commission of India	National Company Law Appellate Tribunal, then the Supreme Court
Special Economic Zones Act, 2005	No	No	Yes	In force	Board of Approval and the Development Commissioner of each zone	Courts
Micro, Small and Medium Enterprises Development Act, 2006	No	Limited, through delayed payment discipline	Yes	In force	Enterprise classification through registration; Micro and Small Enterprises Facilitation Councils	Facilitation Councils for delayed payment references; courts

The map also shows what the field is not. Company law governs the internal life of the firm, securities law governs its conduct in the capital market after the capital issues regime ended, and labour and environmental law impose standing conditions on production. Those bodies of law surround industrial and competition law and are treated in their own guides in this series. The field mapped here is narrower and more specific: it is the law that decides whether a firm may enter and grow, and the law that judges what the firm does with the position it has won. The two decisions were once made by the same administrative State, often in the same ministry corridor, and the interest of the field lies in watching them separate. A few notes on individual rows will make the classification usable. The Capital Issues (Control) Act sits in the entry column because consent was a precondition to raising capital, which for a new industrial project was a precondition to existence; it is the only statute in the field whose gate faced the capital market rather than the factory. The Foreign Exchange Regulation Act is marked for both entry and conduct because it both conditioned entry by foreign capital and policed the ongoing behaviour of firms with foreign equity, a combination that explains why its successor was placed in the banking and foreign exchange cluster rather than here. The Competition Act’s entry mark looks like an anomaly until the logic is stated: combinations are the one form of growth that competition law intercepts before it happens, because a merger’s effect on market structure is easier to prevent than to reverse. The row is honest rather than tidy, and the second qualification section of this guide returns to it. One discipline in reading the table will prevent the commonest error in the field’s summaries. The position column records the statute, not the scheme: a scheme inside a living statute can be dead, as the MRTP approval chapter was dead for eighteen years inside a living Act, and a living statute can be reduced to a fragment of its scheme, as the 1951 Act was reduced by notification to five industries and a takeover code. Family, position and scheme are three separate questions, and the table answers the first two while the sections that follow answer the third, statute by statute, which is the order in which the field should always be interrogated. The SEZ and MSME rows carry no control marks at all, which is the point: a field organised only around control would have no place for them, yet no map of industrial law is complete without the statutes that decide what a zone is and what smallness is worth.

The licensing state: the Industries (Development and Regulation) Act, 1951

The Industries (Development and Regulation) Act, 1951 (Act 65 of 1951), brought into force in May 1952, is the founding statute of the entry-control family and the one member of that family that was never repealed. Its long title states its twin objects: development and regulation. The development object came first in the minds of its framers, who wrote in the aftermath of the Industrial Policy Resolution of 1948 and in the shadow of wartime controls, and who believed that scarce capital, foreign exchange and raw materials had to be steered toward planned priorities rather than left to the accidents of private choice. The regulatory machinery they built was thorough. Existing undertakings in the scheduled industries had to be registered with the Central Government under section 10. Under section 11, no new industrial undertaking could be established except under a licence issued by the Central Government. A licence was also the instrument for manufacturing a new article, and section 13 carried the licensing requirement into the life of an existing undertaking: substantial expansion of a registered undertaking, and a change in its location, each required a licence, and the owner of an undertaking that had escaped registration could not carry on business once the prescribed period ran out. The licence was not a formality recording entry. It specified the product, the capacity, the location and the conditions on which entry was allowed, and in a shortage economy the specification was the substance: licensed capacity determined what could lawfully be produced, and producing beyond it was an offence.

The First Schedule’s contents show what the declaration captured in practice. It was not a list of commanding heights alone. Alongside iron and steel, heavy electrical plant, aircraft, shipbuilding, machine tools and telecommunications equipment stood the ordinary manufactures of a developing economy: sugar, textiles in their several fibres, paper and paperboard, cement and gypsum, fertilisers, drugs, paints and varnishes, soap, leather goods, glass, ceramics, plywood and matches. By the height of the system, organised manufacturing outside the Schedule was the exception, and the small scale and cottage sectors were defined in part by their exclusion from it. The Schedule was amended over the decades as industries were added, split and, in the reform years, struck off, and its biography is the licensing era in tabular form: read the Schedule of the early years, of the system’s height and of the reform years side by side, and the expansion and contraction of the planning ambition is visible without a word of commentary.

Around the licence the Act built a complete apparatus of supervision. The Central Government could investigate an undertaking whose output had fallen, whose quality had deteriorated or whose management appeared prejudicial, under section 15, and could issue directions after investigation under sections 16 and 17. In defined circumstances the government could take over the management or control of an undertaking, under section 18A and the provisions that follow it, and run it through authorised controllers until it was restored or closed. Under section 18G the government could control the supply, distribution and price of articles produced by scheduled industries, the provision that rested on Concurrent List entry 33 and that turned industrial control into control of the product in the market. Development Councils for particular industries advised on targets and standards. The full anatomy of the Act, section by section, is the subject of the companion guide to the IDRA 1951, and the account here stays at the level of the design: a statute that made the State the gatekeeper of industrial capacity, and that treated the gate as an instrument of planning rather than as a check on harm.

Two features of the machinery are worth a paragraph each, because they recur wherever entry control is used in India. The first is the pairing of registration with licensing. Registration under section 10 fixed the census of existing undertakings: who was producing, what, and where. Licensing under sections 11 and 13 controlled the future: new undertakings, new articles, substantial expansions and changes of location. A control system needs both halves, since a gate on new capacity is useless if existing capacity is uncounted, and the pairing explains the administrative texture of the era, a world of registration certificates, letters of intent converted into licences, carrying on business licences, and endorsements of licensed capacity on which production was audited. The second feature is the takeover power. The Act authorised the Central Government, after investigation or in defined emergencies, to take over the management or control of an industrial undertaking, appoint authorised controllers, and in a further class of cases to notify an undertaking for relief, suspending liabilities while a scheme was worked out, or to direct its closure. The licensing statute thus doubled as the State’s instrument for failing industry, and the takeover chapters gave the government of the day a power over existing firms far beyond the gate at entry: a licensee held its capacity at the pleasure of a system that could investigate it, direct it and, in the last resort, run it.

The licence also acquired a secondary legal life that outlasted the planning frame. Because licensed capacity was a measurable, tradeable fact, it figured in excise and import policy, in the allocation of scarce raw materials and imported components, and in the assessment of what counted as unauthorised production when a firm produced beyond its endorsed capacity. Courts reviewing licence decisions applied administrative law: they tested conditions for relevance and procedure, and they intervened where power was used for an extraneous purpose, but the merits of capacity allocation were the executive’s province. The result was a system whose legality was rarely in doubt and whose economics were increasingly in question, and the questioning, as the next section shows, came from the government’s own committees before it came from outside critics.

One institution embodied the system in its daily working. Licensing was administered in the ministry through the Directorate General of Technical Development and its development officers, who assessed capacity applications industry by industry against plan targets, the availability of foreign exchange for imported plant, and the claims of regional balance and small scale reservation. The letter of intent that preceded a licence was the era’s characteristic legal instrument: not a right, but a recorded intention on the strength of which a promoter could raise finance and apply for the further clearances, capital issues consent, foreign collaboration approval, import licences for capital goods, that the supporting gates required. The file moved as a caravan. A failure at any gate stalled the whole project, and the gates were manned by different offices applying different statutes to the same proposal, which is why the industrial lawyer of the licensing era was, in substance, a navigator of clearances. The description matters for the map because the conduct regime’s single regulator, one forum and effects test were designed, self-consciously, as the opposite administrative experience: one statute, one Commission, and a question that could be answered from market evidence rather than from a promoter’s file.

The gate was operated in combination with the industrial policy resolutions and statements that set its direction. The Industrial Policy Resolution of 1956 divided industries into three schedules: industries reserved exclusively for the public sector, industries progressively to be State owned with private enterprise supplementary, and industries left to private enterprise under the licensing system. Seventeen industries stood in the first schedule, including arms and ammunition, atomic energy, iron and steel, heavy plant, aircraft, shipbuilding, telephones and telegraph equipment, and railway transport. Reservation and licensing were distinct instruments that are often confused. Reservation decided who could own; licensing decided who could build, and how much. A private firm could hold a licence in an unreserved industry and still be told what to make, where to make it and in what quantity. The three schedules of the 1956 Resolution expressed the mixed economy as a doctrine of roles. Schedule A reserved the commanding industries to the State, on the reasoning that the capital required exceeded private means and that control of the heights of the economy was the condition of planning the rest. Schedule B named industries, including machine tools, aluminium, chemical manufacture, antibiotics and other essential drugs, fertilisers, synthetic rubber, road and sea transport, in which the State would progressively establish new undertakings while private enterprise supplemented its efforts. Schedule C left the remainder to private enterprise, subject to licence. The doctrine had an internal tension that the licensing record exposed: the State reserved the industries where scale and capital mattered most, then licensed the rest in fragments of capacity too small for the scale economies the doctrine admired, and the Dutt Committee’s proposal of a joint sector, public and private capital in harness for industries neither schedule fitted, was an attempt to relieve the tension from inside the frame. The frame itself held for thirty five years, and its schedules were the map on which every licence application was plotted, which is why the 1991 statement’s reduction of reservation to eight industries, and its release of the rest to entry without licence, reads in retrospect as the moment the map was withdrawn rather than merely amended. The critique that formed against this system inside government itself is part of the record: the Hazari inquiry into licensing in the late 1960s found that large industrial houses had pre-empted licensed capacity, obtaining licences to keep competitors out rather than to produce, and the Industrial Licensing Policy Inquiry Committee of 1969, chaired by Subimal Dutt, concluded that the licensing system had worked in favour of the large houses it was meant to discipline. Those findings matter to the field because they explain why the second entry-control statute was layered on top of the first within the same year.

How did delicensing happen without repealing the IDRA?

Delicensing happened by notification because the 1951 Act had been built with its own valves: exemption powers, the power to vary the licensing requirement for classes of undertakings, and a First Schedule whose practical reach the executive could narrow industry by industry, without any repeal by Parliament.

The Statement on Industrial Policy of 24 July 1991 announced that industrial licensing would be abolished for all industries except a short list related to security, strategy, hazardous substances and environmental concern, and the announcement was executed through notifications under the Act rather than through its repeal. The Act therefore survived its own emptying, and it survives as law with a short licensing list, its investigation and takeover chapters intact, and its declaration in section 2 unamended. Its survival is not merely archival. The takeover chapters remained the legal route by which failing textile mills and other undertakings were taken into public management in the decades when no general insolvency institution for industry existed, and the Act’s machinery for investigation and direction framed the State’s response to industrial sickness long after liberalisation had stripped away the licence. A statute repealed in part by disuse is harder to read than a statute repealed by Parliament, because its operative weight shifts from section to section without any text changing, and the 1951 Act is the field’s best example: the whole of it is in force, and only a fraction of it decides anything in a given year.

The residuum deserves precision, because it is the first of the two qualifications this guide is required to enter against its own organising claim. The Department for Promotion of Industry and Internal Trade maintains the list of industries for which an industrial licence under the 1951 Act remains compulsory, and the list has five heads: distillation and brewing of alcoholic drinks; cigars and cigarettes of tobacco and manufactured tobacco substitutes; electronic aerospace and defence equipment, including all types of defence equipment; industrial explosives, including detonating fuses, safety fuses, gun powder, nitrocellulose and matches; and specified hazardous chemicals, namely hydrocyanic acid and its derivatives, phosgene and its derivatives, and isocyanates and diisocyanates of hydrocarbons. The public sector reservation shrank along a parallel track, from seventeen industries in 1956 to eight under the 1991 statement, and then to a small residuum centred on atomic energy and railway operations, with defence production progressively opened to licensed private participation. The licensing State therefore did not vanish. It contracted to the industries where the original justifications, security and hazard, were strongest, and it left its statute standing as a reminder that the contraction was an act of policy rather than of constitutional necessity. The surviving list also continued to develop in its own terms, which a static account would miss. Defence production, the list’s most protected head, was opened in stages to private licensees and then to higher levels of foreign investment under the licence, so that the licence persisted while the exclusion it once expressed drained away; validity periods for industrial licences were lengthened by executive decision, converting an annual act of supervision into a longer grant; and the licensing that remains for explosives and hazardous chemicals is administered as a safety regime, continuous with the explosives and petroleum codes in the neighbouring clusters of this series, rather than as an instrument for deciding how much of a product the country should have. The residuum, read closely, has itself changed species: what survives of the gate is its safety and security shell, and the allocative kernel that Hazari and Dutt criticised is the part that did not survive.

Entry control in the courts: what the licence litigation settled

The licensing system lived in the courts as administrative law, and the case law of the era settled positions that the later regime inherited. The foundational position was constitutional: the freedom to practise a trade or carry on a business under Article 19(1)(g) is subject to reasonable restrictions in the interest of the general public under Article 19(6), and a licensing scheme for scheduled industries, addressed to planned development and the prevention of wasteful competition for scarce resources, was sustained on that footing. No citizen had a fundamental right to a licence; the licence was a permission the State could condition, and the courts’ supervision ran to the legality of the condition and the fairness of the procedure rather than to the wisdom of the capacity chosen. Where the State’s own conduct was impugned, the litigation of the era developed the doctrines that still structure economic judicial review: that a public authority distributing State largesse, of which a licence was a species, must act on relevant considerations and without arbitrariness, that a policy could change but a decision under it had to be reasoned, and that legitimate expectation could protect a procedure without freezing the policy itself. The industrial cases of the period are therefore read less for their results, most of which upheld the system, than for the habits of review they installed, habits the competition era retained: when a combination is blocked or a penalty imposed, the appellate tribunal asks the administrative law questions the licence cases formulated, about relevance, evidence and reasons, and adds the economic question the old cases never had to ask, whether the order’s market analysis is right. The two eras meet in the appellate courtroom, and the meeting explains a persistent feature of Indian competition litigation, its density of procedural and natural justice points, from the same-Member rule in the cement proceedings to the disclosure of the Director General’s report: a field born in administrative law keeps its procedural conscience when it changes its substantive mind.

The MRTP experiment: controlling size as well as entry

The Monopolies and Restrictive Trade Practices Act, 1969 (Act 54 of 1969), in force from 1 June 1970, grew out of the Monopolies Inquiry Commission of 1965 and out of the licensing critique described above. Its premise differed from the premise of the 1951 Act. The IDRA controlled entry into scheduled industries without asking how large the entrant already was. The MRTP Act was addressed to concentration of economic power itself: its preamble records its objects as ensuring that the operation of the economic system does not result in the concentration of economic power to the common detriment, controlling monopolies, and prohibiting monopolistic and restrictive trade practices. Two features of the original design locate it firmly in the entry-control family. The first is that the Act largely exempted government owned and controlled undertakings unless the Central Government notified otherwise, an exemption whose disappearance from the later competition statute is one of the sharpest contrasts in the field. The second is Part A of Chapter III, sections 20 to 26, which applied to undertakings above a prescribed asset threshold and to dominant undertakings, and which required the prior approval of the Central Government for substantial expansion (section 21), for establishing a new undertaking (section 22), and for merger, amalgamation and takeover (section 23). A large firm in 1975 therefore faced two gates, the IDRA licence for its capacity and the MRTP approval for its growth, and both gates asked about the identity and size of the applicant rather than about the effect of its conduct on any market.

The MRTP Act was never only an entry-control law, and its hybrid character is why this guide calls it an experiment. Alongside the approval scheme stood a Monopolies and Restrictive Trade Practices Commission charged with inquiring into monopolistic trade practices, which were referred to the Central Government for orders, and restrictive trade practices, against which the Commission could direct discontinuance. Agreements of prescribed kinds had to be registered, and the Act worked through the concept of a practice being prejudicial to the public interest, with statutory gateways through which some restrictive practices could pass. The Sachar Committee of 1978, reviewing the working of the Act and of company law, recommended that unfair trade practices be brought within the scheme, and the amendment of 1984 added a chapter on unfair trade practices, covering misleading advertising and false representations, together with a power for the Commission to award compensation. The experiment, in other words, contained the embryo of conduct regulation inside an entry-control frame: a commission, inquiries, and practices tested against the public interest, but no general prohibition of anti-competitive agreements, no effects test organised around a relevant market, and an approval scheme that still treated growth by large firms as the thing to be watched.

The experiment was unwound in two acts separated by eighteen years. The amendment of 1991 omitted sections 20 to 26 with effect from 27 September 1991, deleting the prior approval scheme at a stroke and recording the reason in the Statement of Objects and Reasons of the amending Bill: the thrust of industrial policy had shifted to controlling monopolistic, restrictive and unfair trade practices rather than requiring prior approval for expansion, new undertakings, mergers and takeovers, since economies of scale had become necessary for productivity and international competitiveness. What remained after 1991 was the Commission and its trade practice jurisdiction, sections 27 and 27A on division of undertakings and severance of interconnection being retained in amended form, and the Act lived on as a conduct law of limited remedial strength until its repeal. The repeal came through section 66 of the Competition Act, 2002, brought into force so that the MRTP Act stood repealed with effect from 1 September 2009. The MRTP Commission was dissolved in October 2009, and the savings scheme sorted its pending business: cases involving monopolistic or restrictive trade practices passed to the Competition Appellate Tribunal to be decided under the repealed Act, cases involving only unfair trade practices passed to the consumer commissions under the Consumer Protection Act, 1986, and investigations were divided on the same lines. The repeal and its savings are the subject of the companion guide to the MRTP repeal, and the point for the map is the date and the routing: after October 2009, no Indian statute any longer inquired into trade practices under the MRTP scheme, and its pending files were the last business of the approval era.

The trade practice side of the experiment deserves a fuller sketch, since it is the ancestor of the conduct regime. A monopolistic trade practice was defined by its effects: maintaining prices at an unreasonable level, preventing or lessening competition unreasonably, limiting technical development or capital investment, or keeping quality at a degraded standard. A restrictive trade practice was defined more widely, as a practice with the effect of preventing, distorting or restricting competition, and the Act listed registrable agreements, covering refusals to deal, tie up sales, exclusive dealing, collective and resale price fixing and similar arrangements, which had to be registered with the Registrar of Restrictive Trade Practices. An unfair trade practice, after 1984, covered false representations, misleading advertisements and deceptive contests and gifts. The Commission’s powers differed by category. For monopolistic practices it inquired and reported, and the Central Government made the order, which could extend to regulating production and supply or, in the division provisions retained after 1991, to breaking an interconnection between undertakings. For restrictive and unfair practices the Commission could direct discontinuance and, after the 1984 amendment, award compensation to a person who had suffered loss. Investigations were conducted for the Commission by its Director General of Investigation and Registration, an office whose name and function the later competition statute inherited. Measured against the settlement that replaced it, the experiment’s limits were structural: the test was prejudice to the public interest rather than effect on competition in a market, the most serious category ended in a report to the government that controlled entry under the same scheme, and the Commission carried the whole load without the power to fine. The rump years from 1991 to 2009 showed the design in its reduced form, a tribunal like body deciding trade practice cases under a statute whose centre of gravity, the approval scheme, had been removed from beneath it. In those years the Commission’s docket became, in large part, a consumer docket: complaints about misleading advertisements, deficient housing projects, false representations by sellers and builders, and restrictive clauses in dealership and franchise arrangements. The work was real and the compensation power was used, but it pointed in two directions at once, toward the consumer protection regime that would absorb the unfair trade practice jurisdiction in 2009, and toward the competition regime that would take the restrictive practice jurisdiction onto a different doctrinal footing. The division of the pending files at the repeal followed exactly that fork, and it is the neatest illustration in the field of an institution’s business outliving its statute: the cases were sorted not by the body that had heard them but by the nature of the complaint, trade practice substance to the competition appeal route, consumer substance to the consumer commissions.

The supporting gates: capital issues and foreign exchange

Entry control had two supporting gates that completed the enclosure, and a reader of the field should be able to name them even though each is treated in depth elsewhere in this series. The Capital Issues (Control) Act, 1947 (Act 29 of 1947) controlled the raising of capital: an issue of capital in India required the consent of the Controller of Capital Issues, an officer of the Central Government, who fixed not only whether capital could be raised but on what terms, including the premium at which shares could be offered. Where the IDRA decided who could build and the MRTP Act decided who could grow, the capital issues regime decided who could finance, and the three decisions together meant that a large industrial project passed the State three times before it existed. The regime ended with the reforms: the Act was repealed in 1992, in the same legislative season in which the Securities and Exchange Board of India received its statutory charter under the SEBI Act, 1992 (Act 15 of 1992), and the Controller’s consent jurisdiction was replaced by a disclosure based system administered by a market regulator. The substitution is a small, exact image of the larger reversal: permission to raise capital gave way to liability for what the prospectus said.

The foreign exchange gate was the Foreign Exchange Regulation Act, 1973 (Act 46 of 1973), which subjected foreign investment, foreign collaborations and payments to a permission regime administered by the Reserve Bank of India, and which required companies with foreign equity above prescribed levels to dilute their holdings or seek approval to retain them. Foreign equity was, in the planning frame, one more capacity decision, and FERA treated it as such. The statute belongs to the banking and foreign exchange cluster of this series and is treated there; its place in this map is a pointer, recorded because no account of entry control is complete without it. FERA was replaced by the Foreign Exchange Management Act, 1999 (Act 42 of 1999), which recast the subject as management rather than regulation and decriminalised its contraventions, and the change of verb in the title is itself a summary of the transition this guide describes.

The capital issues gate had a texture worth one paragraph, because it shows how completely the permission habit had colonised the field. The Controller of Capital Issues consented to the size of an issue, its timing, the price at which shares could be offered and the premium that could be charged, and the office applied a pricing formula that left successful companies issuing shares well below the prices their prospects would have carried. The control dated from wartime, when capital was rationed as a war material, and it persisted because the planning frame treated the investing public’s savings as a planned resource like steel or foreign exchange. Its abolition in 1992 and the transfer of the capital market to a disclosure regulator is the cleanest of the three gate removals, since the function did not shrink by notification but changed species overnight: the State stopped deciding what capital a company might raise and started policing what the company told the people who supplied it. The foreign exchange gate changed species more slowly. FERA’s section 29 regime required companies with substantial foreign equity to dilute to prescribed levels or to accept conditions, and several well known firms left India rather than comply, an episode that fixed the Act’s reputation; its replacement by a management statute that made contraventions civil defaults rather than offences completed the same passage from permission to liability, several years after the capital market had made it.

The committees that taught the State to doubt its gates

The passage between regimes was argued out, over three decades, in committee reports, and the sequence of those reports is the intellectual history of the field. The Monopolies Inquiry Commission of 1965, chaired by K. C. Das Gupta, documented the concentration of economic power in Indian industry and recommended a standing body to watch monopolistic and restrictive practices, the recommendation from which the MRTP Act followed. The Hazari inquiry, reporting on industrial planning and licensing policy in the late 1960s, examined the licensing system itself and found the pre-emption pattern described in the IDRA section: houses with early information and administrative access obtained licences ahead of rivals and held capacity without always building it. The Dutt Committee of 1969, the Industrial Licensing Policy Inquiry Committee, widened the finding into an account of how licensing, import control and institutional finance had together advantaged the larger houses, and recommended a re-sorting of industries among the public sector, the large houses, the joint sector and small industry. The Sachar Committee of 1978 reviewed company law and the MRTP Act together and proposed, among other reforms, the unfair trade practices chapter enacted in 1984, together with stronger disclosure and a more court like Commission. The Raghavan Committee, the High Level Committee on Competition Policy and Law appointed in 1999 and reporting in 2000, closed the sequence by recommending the repeal of the MRTP framework and the enactment of a modern competition law on the conduct model, with a new commission, an appellate tribunal and merger notification. Its report went beyond institutional design into the structure of the field itself: it recommended that the new law apply to government departments and public sector undertakings on the same footing as private firms, that sector regulators and the competition authority be bound into a regime of mutual reference rather than left to contest jurisdiction, and that competition advocacy be made a statutory function, so that the State would argue against its own anti-competitive policies in the open. Each of those recommendations is visible in the finished settlement: the enterprise definition that Coal India construed, the reference clauses in sections 21 and 21A, and the advocacy chapter that gave the young Commission its first six years of work. The report is therefore the closest thing the field has to a founding document, and the settlement of 2002 to 2011 is its enactment with amendments, rather than a design made fresh in the drafting office. Read in order, the reports move the official question step by step: from whether concentration exists, to whether the gate causes it, to whether the gate should exist at all. The statutes followed the questions with a lag of years, and the lag is itself one of the field’s lessons, since the 1969 Act enacted the 1965 answer just as the 1967 and 1969 reports were undermining its premise.

What a policy statement could not do: the statutory residue of reform

The unwinding’s reliance on executive instruments has a limit that the map should record, because it explains the second wave of reform statutes in the decade after 1991. A policy statement can empty a licensing list and a notification can exempt, but neither can repeal a prohibition written into an Act, open a nationalised industry to private entry, or create a regulator. Insurance is the clean example. The industry had been nationalised by statute, life insurance in 1956 and general insurance in 1972, and the Insurance Act, 1938 as it stood after nationalisation left no room for a private insurer to be licensed at all; opening the sector therefore required the Insurance Regulatory and Development Authority Act, 1999 (Act 41 of 1999), which created the regulator and amended the insurance code to admit private and foreign capital within a statutory ceiling. Electricity followed the same pattern a few years later, the Electricity Act, 2003 replacing the supply era statutes and creating the commission structure within which delicensed generation and licensed networks could coexist. Telecommunications acquired its regulator by the TRAI Act, 1997 after executive experiments with a regulator by ordinance, and securities had led the sequence with the SEBI Act, 1992. The reform era’s statute book is therefore double layered in a way the map must show: a liberalising layer that subtracted controls, much of it by notification, and a regulatory layer that added institutions, all of it by statute. The Competition Act belongs to the second layer. It is the keystone regulator statute of the reform, and its late commencement dates, 2009 and 2011 for the operative chapters, are the dates when the second layer was finally completed around it.

The long unwinding, 1991 to 2009

The transition between the two regimes is the subject of a companion guide in this series, the account of the passage from the licence raj to liberalisation, and of a study article on the staged commencement of the competition statute; the narrative is held here to the outline that the map requires. The setting of the unwinding should be stated, because the speed of 1991 is unintelligible without it. The reforms were announced in a balance of payments crisis: foreign exchange reserves had fallen to a level covering only a few weeks of imports, gold had been pledged abroad, and the incoming government presented liberalisation not as an ideological conversion but as the price of solvency. The legal forms followed that political economy. A government legislating in a crisis, with a minority in Parliament, reaches for the instruments that need no majority: policy statements, notifications under existing Acts, amendments carried on the year’s finance and trade practice Bills. The durable consequence for the statute book is the one this section has traced: the reforms of 1991 are recorded in the Gazette’s notification pages more fully than in its Act pages, and the repeal that closed the era waited eighteen years for a parliamentary occasion. The unwinding began by policy statement rather than by statute. The Statement on Industrial Policy of 24 July 1991 abolished licensing for all but eighteen industries, cut the public sector reservation to eight, and announced the end of prior approval under the MRTP Act, which the amending Act of the same year executed by omitting sections 20 to 26. The statement was a wider document than its licensing chapter: it opened direct foreign investment to an automatic route up to fifty one per cent equity in high priority industries, freed foreign technology agreements from case by case permission, and recast the public sector’s role toward withdrawal from industries where private enterprise was adequate. Its legal significance for this field is that a single executive statement re-drew the operating content of three statutes at once, the 1951 Act’s licensing list, the MRTP Act’s approval scheme and the foreign exchange regime’s equity ceilings, while the texts themselves were amended on a slower timetable. The statement is therefore best cited in this field the way practitioners cite it, as the instrument that changed what the law did, with the amending Acts and notifications cited behind it as the instruments that changed what the law said. The capital issues regime was repealed in 1992. Through the following decade the licensing list under the 1951 Act was shortened by notification, industry by industry, until it reached the five heads recorded above, and the foreign exchange statute was replaced at the turn of the century. The conduct statute was enacted in 2002, on the blueprint of the Raghavan Committee described below, but it was brought into force in stages over eight years, so the two regimes overlapped for most of a decade: the MRTP Commission continued its trade practice work until 2009, while the Competition Commission of India, established on 14 October 2003, began with advocacy and institutional preparation and received its enforcement chapters only in May 2009 and its combination chapter in June 2011. The repeal of the MRTP Act in September 2009, rather than any single reform statute, is the cleanest closing date for the entry-control era, and even that date is untidy, since the 1951 Act was left standing and the sector statutes were left licensing entry in their own fields. It is worth noticing what kind of event a repeal by a successor statute is, because the 2009 repeal is the field’s model of the genre. The repealing section was not in the Competition Act as a free standing code would carry it; section 66 was a savings machine, transferring cases by category, splitting the old Commission’s files between the new appellate tribunal and the consumer commissions, dividing the Director General’s unfinished investigations on the same lines, and preserving the repealed Act as the governing law for everything transferred. The technique respects a principle the licensing era had taught by violation: rights and liabilities accrued under a control regime do not evaporate when the regime changes its mind, and a transition that confiscated pending positions would reproduce, in the name of liberalisation, the arbitrariness that liberalisation existed to end. The rhythm of the changeover, enforcement chapters in May, repeal in September, the appellate tribunal functioning on transferred cases from October, was the sound of that principle being observed in the calendar. Two features of the unwinding repay attention because they recur in Indian legislative practice. The first is that policy moved before law. The industrial policy statement of July 1991 was an executive document, and the statutory changes followed it: the MRTP amendment within the year, the capital issues repeal in 1992, and delicensing by notification under the 1951 Act across the following decade, while the replacement statute arrived only in 2002 and its enforcement chapters later still. A lawyer reading only the statute book would misdate the liberalisation by years in both directions, finding entry control alive in texts that notifications had emptied and finding no competition law at all in the years when the policy debate had already settled its form. The second feature is the staged commencement of the Competition Act itself. The Act was enacted with a commencement clause allowing different dates for different provisions, and the government used it fully: the establishment provisions and the advocacy function came first, the Commission being constituted in October 2003; the anti-competitive agreements and abuse of dominance chapters followed on 20 May 2009, within weeks of the MRTP repeal taking effect that September; and the combination chapter closed the sequence on 1 June 2011, after the Commission had staffed and written its combination regulations. The overlap was therefore deliberate sequencing rather than drift: the old conduct body was not dissolved until the new one could take its cases, and merger control, the chapter most entangled with transaction practice, was given the longest runway. Legal transitions of this scale are sedimentary: each layer remains visible under the next, and several of the border disputes described later in this guide are disputes between layers.

The conduct settlement: the Competition Act, 2002

The Competition Act, 2002 (Act 12 of 2003) received the assent of the President on 13 January 2003. Its long title states the settlement in one sentence: a Commission is established to prevent practices having adverse effect on competition, to promote and sustain competition in markets, to protect the interests of consumers and to ensure freedom of trade carried on by other participants in markets. Every operative choice in the Act serves that text, and each choice reverses a corresponding choice in the entry-control statutes. The Act is organised around three prohibitions and one regulatory chapter. Section 3 prohibits agreements between enterprises, associations and persons that cause or are likely to cause an appreciable adverse effect on competition within India, and declares such agreements void; horizontal agreements of the cartel kinds listed in section 3(3), including price fixing, output limitation, market sharing and bid rigging, are presumed to have that effect, while vertical agreements under section 3(4), such as tie-in arrangements, exclusive supply and distribution agreements, refusals to deal and resale price maintenance, are tested on their facts against the factors in section 19(3). Section 4 prohibits abuse of a dominant position, defining the abuses to include unfair or discriminatory pricing and conditions, limiting production or technical development, denying market access, imposing supplementary obligations and leveraging dominance in one market to enter another; the holding of dominance is not itself prohibited. Sections 5 and 6 regulate combinations: acquisitions, mergers and amalgamations crossing the asset and turnover thresholds in section 5 must be notified to the Commission, may not be given effect until cleared or until the statutory period runs, and are void if they cause or are likely to cause an appreciable adverse effect on competition. The thresholds are stated in two measures, assets and turnover, applied both to the parties jointly and to the group to which the acquired enterprise would belong, and both in an India form and in a worldwide form with a minimum India component, so that a foreign to foreign transaction with a sufficient Indian footprint is caught as surely as a domestic merger. Below the statutory frame, the Central Government has long maintained a de minimis exemption by notification for acquisitions of small targets, and the Commission’s regulations excuse classes of transaction that ordinarily raise no competition concern, investment acquisitions and intra group reorganisations among them. The architecture is therefore a sieve with several meshes: the statute’s thresholds, the exemption notifications, the regulation based safe harbours, and, after 2023, the deal value threshold laid over the whole, catching what falls through the older meshes when the price paid betrays the target’s strategic weight. The detailed exposition of these provisions belongs to the companion pillar guide to the Competition Act 2002; the map requires the architecture and the test.

The test deserves its own emphasis because it is the point on which the two regimes divide most cleanly. The entry-control statutes asked administrative questions: is this industry scheduled, is this undertaking above the threshold, is this capacity consistent with the plan. The Competition Act asks an economic question about a defined market: what is the relevant market, geographically and by product, and does the agreement, the abuse or the combination cause or threaten an appreciable adverse effect on competition within it. Section 19 lists the factors the Commission must weigh, market share, size and resources of competitors, entry barriers, the degree of countervailing power, the likelihood of price or output effects, and, for dominance under section 19(4), factors that expressly include a monopoly or dominant position acquired as a result of a statute or by virtue of being a government company or public sector undertaking. The remaining factors in section 19(4) show the same even handed construction: the Commission weighs the enterprise’s size and resources, the size and importance of its competitors, its economic power and commercial advantages, vertical integration, the dependence of consumers, the entry barriers created by regulation, finance and location, countervailing buying power, market structure, and the social obligations and social costs that a statutory incumbent may carry, together with the enterprise’s relative advantage by way of contribution to economic development. A State monopoly is therefore neither presumed abusive nor presumed benign; its statutory origin enters the scales as one factor among many, which is the textual ground on which the Coal India judgment later stood. The section is, in miniature, the whole settlement: dominance described economically, power weighed in context, and liability attached only when the weighing ends in abuse. Nothing in the Act prohibits size. Nothing in it empowers the Commission to license entry into an industry at large. Its jurisdiction is triggered by conduct and by combinations, and its remedies, cease and desist directions, modification of agreements, division of a dominant enterprise in the extreme case under section 28, and penalties under section 27 that reach ten per cent of average turnover and, for cartels, the higher of three times the profit or ten per cent of turnover for each year of continuance, are all addressed to behaviour in a market.

What is a relevant market, and why does the analysis begin there?

A relevant market is the arena within which the Commission tests competitive effect: a relevant product market of goods or services that buyers treat as interchangeable or substitutable, within a relevant geographic market whose conditions of competition are distinctly homogeneous. The analysis begins there because appreciable adverse effect has no answer in the abstract.

Market shares, entry barriers, buyer power and the constraint exerted by rivals can only be measured inside a defined arena, so the width of the arena usually decides the case before the conduct is reached.

The Act’s enforcement design matches the test. The Commission inquires on information received, on a reference from a government or statutory authority, or of its own motion, under section 19; where a prima facie case appears it directs the Director General to investigate under section 26, and after the report it hears the parties and passes orders under section 27 and the sections around it. In Competition Commission of India v. Steel Authority of India Ltd (2010) 10 SCC 744, the Supreme Court described the Commission’s functions at the direction stage as regulatory and inquisitorial rather than adversarial, a characterisation that fits a body built to police markets rather than to license them. Penalties and procedure are enforced through the Commission’s own powers, civil courts are barred by section 61, and the Act is given overriding effect by section 60 while section 62 declares that its provisions are in addition to, and not in derogation of, any other law, a pair of clauses whose tension defines the sectoral border examined below.

The settlement was amended in significant respects by the Competition (Amendment) Act, 2023 (Act 9 of 2023), which received assent on 11 April 2023 and was brought into force in stages. Four changes matter at the level of the map. First, merger control acquired a deal value threshold: a transaction whose value exceeds two thousand crore rupees must be notified where the target has substantial business operations in India, a test aimed at acquisitions whose target’s assets and turnover are small in relation to the price paid, and given effect through revised combination regulations in 2024. Second, the Act acquired settlement and commitment mechanisms, under which a party under investigation may offer commitments at an early stage or seek settlement after the Director General’s report, in each case for a resolution without a contested penalty order, cartels apart. Third, the cartel prohibition was extended to facilitators who participate in furtherance of a horizontal agreement without being competitors themselves, the hub and spoke pattern. Fourth, penalties for the principal contraventions were re-based on the global turnover of the enterprise, displacing the relevant turnover limitation that the Supreme Court had read into section 27 in Excel Crop Care Ltd v. Competition Commission of India (2017) 8 SCC 47, and the outer time limit for the Commission’s decision on a combination was shortened from two hundred and ten days to one hundred and fifty, with the prima facie opinion stage compressed in step. The amendment also wrote a limitation discipline into the inquiry chapter, introduced a leniency plus incentive for a cartel member whose disclosure exposes a second cartel, and relaxed the standstill obligation for acquisitions made through open offers and stock exchange purchases, provided the acquirer does not exercise the rights of ownership until clearance. Its provisions commenced in tranches from May 2023, the combination and deal value provisions following with the revised combination regulations of 2024. The prohibitions found their working content in a series of set piece proceedings, and three of them fix the doctrine as the cases in the pillar guide develop it. The cement proceedings, described in the Commission section below, established that price parallelism maintained through a trade association’s circulation of data could ground the section 3(3) presumption. The automobile spare parts proceedings, decided by the Commission in 2014 against fourteen car manufacturers, supplied the leading treatment of the vertical and dominance chapters in aftermarkets: the manufacturers’ restrictions on the supply of spare parts and diagnostic tools to independent repairers were held to deny market access and to foreclose competition in the repair market, and the case fixed the propositions that a manufacturer’s own branded parts can constitute a relevant market and that intellectual property claims do not immunise the terms on which parts and tools are withheld. The platform orders of the years after 2018, against a dominant operator of a mobile operating system and application store, tested the leveraging limb of section 4, the use of dominance in one relevant market to entrench position in another, and the remedy orders that followed, directing changes to billing and distribution practices, showed the regime’s remedial imagination moving from penalties toward supervised conduct. A word on the machinery inside the prohibitions completes the settlement’s outline. Section 3(3)’s presumption is a rule about proof: once an agreement of the listed horizontal kinds is shown, the appreciable adverse effect is presumed and the parties must displace it, which is why bid rigging and price fixing are treated as the regime’s centre of gravity. Section 19(3) lists the factors for the effects inquiry, including the creation of entry barriers, the driving of existing competitors out of the market, the foreclosure of competition, and, on the other side of the ledger, accrual of benefits to consumers, improvements in production or distribution, and the promotion of technical, scientific and economic development. Section 26 builds the procedure in stages: a prima facie screen, a Director General’s investigation with powers of summons and search under the Act, a hearing, and orders that can include interim relief under section 33 restraining conduct while the inquiry runs. Contravention of the Commission’s orders attracts penalty under section 42, and implementing a combination without the required notice, the practice known as gun jumping, attracts penalty under section 43A, a provision inserted by the 2007 amendment that also recast the appellate design. The leniency scheme in section 46, under which a cartel participant who makes a full disclosure may receive a lesser penalty, supplies the evidentiary engine for the prohibition that needs it most, since cartels are proved, more often than not, from inside. Where no insider speaks, proof runs on circumstance, and the Supreme Court settled the standard in Rajasthan Cylinders and Containers Ltd v. Union of India in 2020, arising from the prosecution of manufacturers of liquefied petroleum gas cylinders for rigging bids in tenders of the public sector oil companies: the Court held that the Commission may act on preponderance of probabilities and that parallel conduct, joined with the plus factors that make independent action improbable, can establish the agreement the Act prohibits, since direct evidence of a cartel’s meetings is precisely what the conspirators exist to conceal. The evidentiary rule belongs in a map of the field because it decides how real the conduct regime is in the cases that define it: a prohibition that could be enforced only on documents would govern only the careless, and the licensing era’s files, in which every capacity was recorded, would have been exchanged for a regime blind to everything that was not written down. Each change widens the conduct regime’s reach, and the first of them widens its one pocket of prior permission, a point taken up in the qualifications below.

The Commission and the appellate chain

The institutional centre of the conduct regime is the Competition Commission of India, a body corporate established under section 7 of the Act and constituted on 14 October 2003, although its enforcement chapters commenced years later. The Commission consists of a Chairperson and between two and six other Members appointed by the Central Government, and it works with the office of the Director General, its investigative arm, whose reports found the contested proceedings that follow. The Commission’s working method, its information led cases, its dawn raids under judicial warrant in later practice, its leniency regime for cartel informants and its published orders are the subject of the companion guide to CCI antitrust enforcement in India, and they are noticed here only to fix the institutional map: one national regulator for competition across the whole economy, in place of the industry by industry gatekeepers of the licensing era, exercising jurisdiction that follows conduct and combinations wherever they occur. The Commission’s enforcement record supplies the settlement’s working illustrations, and two episodes state its reach without exaggeration. In the cement cartel proceedings, on information from the Builders Association of India, the Commission in 2012 penalised the leading cement manufacturers for price parallelism maintained through their association, the Appellate Tribunal remanded the matter on the natural justice ground that the Member who heard the case must join in deciding it, and the Commission decided afresh in 2016 with penalties recomputed, an appellate history that taught the institution its procedural discipline in public. In the digital economy, the Commission’s orders against a dominant search and mobile platform operator in the years after 2018, and its market study of e-commerce published in 2020, carried the effects method into markets where the product is free to the user and the currency is attention and data, testing the relevant market doctrine at its elastic limit. The Commission also carries functions that a licensing authority never had. Under section 49 it advises governments that refer a proposed policy to it and conducts competition advocacy, the deliberate building of a competition culture through studies, market inquiries and published guidance; the advocacy chapter was among the first brought into force, and for the six years before the prohibitions commenced it was, in substance, the Commission’s whole work, which gave the institution a research led character that its enforcement years retained. Compensation follows findings: a person who has suffered loss from a contravention established by the Commission or the Appellate Tribunal may apply for compensation under section 53N, so private recovery rides on public enforcement rather than replacing it. And the Commission’s jurisdiction is expressly extraterritorial in reach under section 32, extending to agreements, dominance and combinations outside India that have an appreciable adverse effect within it, a necessary counterpart to a regime whose subjects are, very often, firms incorporated elsewhere selling into Indian markets. The Director General’s office completes the picture. Appointed under section 16 and working under the Commission’s direction, the Director General investigates on reference under section 26, with the powers of a civil court for summoning witnesses and requiring documents, and, for search and seizure, the warrant of the Chief Metropolitan Magistrate under section 41. The separation between investigator and adjudicator was a design choice carried over from the MRTP scheme and sharpened in the new Act: the Commission does not gather its own evidence in contested cases, and the Supreme Court’s insistence, in the line of cases on natural justice within the Commission’s procedure, that the report be disclosed and the parties heard on it, keeps the two functions distinct in practice as well as in text. An institution so designed decides fewer cases than a licensing directorate once did, and decides them more like a court, which is again the administrative form of the passage from permission to effect.

The institution invites comparison with the body it replaced, and the comparison states the settlement’s theory of expertise. The MRTP Commission was a recommendatory and adjudicatory hybrid, appointed without a statutory selection committee, dependent on the sponsoring ministry, and unable to fine. The Competition Commission was designed against that template: a Chairperson and Members chosen on the recommendation of a selection committee constituted under section 9, security of tenure with removal only on stated grounds after inquiry, a professional investigative office separated from the bench, and power to impose penalties measured in percentages of turnover. The design treats competition adjudication as a discipline of its own, economics practised under legal forms, and it distributes the discipline across two levels, since the appellate tribunal, and after 2017 the National Company Law Appellate Tribunal, reviews the Commission’s economics as well as its law. Whether the design has been matched by appointments and staffing in practice is one of the contested questions recorded later in this guide; the blueprint itself is unambiguous, and it is the institutional form of the proposition that the referee of a market economy should be a specialist, a tenure protected specialist, rather than a section of the ministry that once issued the licences. Above the Commission stands an appellate chain that has itself been rebuilt once. As enacted, the Act sent appeals from the Commission directly to the Supreme Court. The Competition (Amendment) Act, 2007 (Act 39 of 2007) interposed a specialist tribunal, the Competition Appellate Tribunal, which heard appeals against the Commission’s principal orders and adjudicated compensation claims. The Finance Act, 2017 then merged the appellate function into the National Company Law Appellate Tribunal, with effect from 26 May 2017, as part of a general consolidation of tribunals, and the definition of the Appellate Tribunal in the Competition Act was amended to match. Appeals against the Commission’s orders under the sections listed in section 53A therefore lie to the National Company Law Appellate Tribunal, and a further appeal lies to the Supreme Court under section 53T on the grounds available for a second appeal in civil procedure. Merger control in practice has developed a procedure with its own rhythm, and the rhythm is part of the field’s texture. A notice is filed in the shorter Form I or, for cases with overlaps, the detailed Form II; the Commission forms a prima facie view within the statutory window, thirty days in the design the 2023 amendment compressed, and most notices end there with approval. Cases that raise a prima facie concern move to a second phase, with publication of the combination’s details, invitations to affected persons, and, where the concern survives, a show cause stage and a hearing. The outcomes are approval, approval with modifications, or prohibition. Modifications divide into the structural, divestment of a plant, a brand or a business line to a buyer the Commission approves, and the behavioural, commitments about access, pricing or information handling that the Commission then monitors, sometimes through a monitoring agency. A green channel, introduced by the combination regulations in 2019, gives deemed approval on filing where the parties certify no horizontal overlap, no vertical interface and no complementary relationship, shifting the system’s lightest cases out of the queue altogether. Prohibitions remain rare enough to be events; the system’s centre of gravity is clearance, negotiated where necessary, which is why merger control, though a prior permission in form, is experienced by practitioners as a regulatory dialogue rather than as the licence raj’s allocative decision: the Commission does not choose the country’s industrial structure, it strikes out the transactions that would damage competition within it. The chain matters to the character of the regime. A licensing decision under the old statutes was an exercise of executive discretion correctable, in the main, by judicial review on administrative law grounds. A competition order is an adjudication on evidence and economic analysis, appealable on merits to a tribunal and then to the Supreme Court, and the difference in the appellate design is the institutional form of the difference between permission and effect.

The sectoral border: where the regulators meet

The conduct regime does not occupy the economy alone. Telecommunications has the Telecom Regulatory Authority of India under the TRAI Act, 1997 (Act 24 of 1997), with the Telecom Disputes Settlement and Appellate Tribunal above it; electricity has the Central and State Electricity Regulatory Commissions under the Electricity Act, 2003 (Act 36 of 2003); securities have the Securities and Exchange Board of India; insurance has the Insurance Regulatory and Development Authority under the IRDAI Act, 1999 (Act 41 of 1999); and banking has the Reserve Bank of India under the Reserve Bank of India Act, 1934 (Act 2 of 1934) and the Banking Regulation Act, 1949 (Act 10 of 1949). These regulators are, in the main, entry and conduct regulators for their own sectors combined: they license or authorise entry, they set or approve tariffs and standards, and they police the behaviour of licensees. The Competition Act meets them on two clauses that pull in opposite directions. Section 60 gives the Act effect notwithstanding anything inconsistent in any other law. Section 62 provides that the Act’s provisions are in addition to, and not in derogation of, the provisions of any other law in force. Sections 21 and 21A supply the working machinery: a statutory authority may refer a competition issue to the Commission, and the Commission may refer an issue within another authority’s province to that authority, each reference producing an opinion that the receiving body must record reasons for departing from.

The courts have converted those clauses into a doctrine of sequence rather than a doctrine of exclusion. The leading authority is Competition Commission of India v. Bharti Airtel Ltd, decided by the Supreme Court on 5 December 2018. Telecom operators had complained to the Commission that the incumbent operators had cartelised by denying points of interconnection to a new entrant. The Commission formed a prima facie view and directed investigation; the operators answered that interconnection was governed by licence conditions and interconnect agreements within the Telecom Regulatory Authority’s province. The Bombay High Court held on 21 September 2017 that the Commission should await the sector regulator’s determination, and the Supreme Court upheld that course. The Court reasoned that the jurisdictional facts on which the competition case depended, whether the incumbents were obliged to provide interconnection on the terms alleged, were matters for the sector regulator in the first instance; the Commission’s jurisdiction over anti-competitive conduct was not ousted but was, in the Court’s framing, pushed to a later stage, and the section 21A reference was the channel through which the two bodies were to engage. A cognate boundary was drawn for patents in the Ericsson litigation, where the Delhi High Court held in 2016 that the Patents Act, 1970 did not oust the Commission’s jurisdiction over the licensing conduct of a patent holder, the two statutes operating on different planes. The reasoning repays attention because it supplies the general test the Bharti Airtel sequence presupposes. The Patents Act governs the existence, validity and infringement of the right and the remedies between holder and implementer; the Competition Act governs the holder’s conduct in the market, including discriminatory royalty behaviour by a dominant holder. A question that belongs to the first plane, whether the patent is valid or infringed, is for the patent forum; a question on the second plane, whether the terms on which licences are offered abuse a dominant position, is for the Commission; and where the second inquiry needs a fact from the first, the sequence, not the exclusion, of jurisdictions is the answer. The same template has since been argued across the other borders, in broadcasting, in ports and in pharmaceuticals, with the courts repeating the two moves that the 2016 and 2018 decisions established: read the sector statute for its own question, and let the competition statute answer its question after, not instead. The working rule across the case law is consistent: the sector regulator decides the sectoral question first where a competition case turns on it, the Commission decides the competition question, and neither statute silently repeals the other. For the map, the border is a border of sequence and specialisation, patrolled by references and by the appellate courts, and it is the busiest frontier in the field because digital and network industries keep presenting conduct that is, at once, a licence question and a competition question.

The frontier has several distinct stretches. In electricity, the Electricity Act, 2003 contains its own competition provision, section 60, empowering the Appropriate Commission to act where a licensee or generating company abuses a dominant position or enters an anti-competitive agreement, so electricity presents a genuine textual overlap rather than a sequencing problem alone. In banking, amalgamations run through the Reserve Bank under sections 44A and 45 of the Banking Regulation Act, 1949, and the Central Government has used section 54 of the Competition Act to exempt classes of banking amalgamation from the combination chapter, which makes banking the sector where the conduct statute has been most deliberately kept at a distance. In telecommunications, disputes between licensees go to the Telecom Disputes Settlement and Appellate Tribunal under the TRAI Act, while competition complaints come to the Commission, and the Bharti Airtel sequence governs the hand off between them. In insurance and securities, tariff, product and market conduct sit with the sector regulators while cartels and abuse in those markets remain within the Commission’s text. The pattern across the stretches is not a single rule but a family of accommodations, and the reader should distrust any account of the border that states one: sections 60 and 62, the reference machinery and the case law have produced a working federalism of regulators, in which the same facts can found two proceedings, provided each institution answers its own statute’s question and the courts police the order in which the answers are given.

Public sector undertakings and the sovereign functions exception

No provision marks the distance between the two regimes more sharply than their treatment of the State as a market actor. The MRTP Act, as noted, exempted undertakings owned or controlled by government from its scheme unless notified into it: the approval State did not propose to approve itself. The Competition Act takes the opposite course. Section 2(h) defines an enterprise to include a person or a department of the Government engaged in production, storage, supply, distribution, acquisition or control of goods, or in the provision of services, and the definition of a person in section 2(l) includes a company and a government company. The only exclusion is for activity of the Government relatable to the sovereign functions of the Government, including the activities of the departments of the Central Government dealing with atomic energy, currency, defence and space. Section 19(4), as noted, makes a statutory monopoly or government company status a factor in assessing dominance rather than a shield against the inquiry.

The Supreme Court settled the construction in Coal India Ltd v. Competition Commission of India, reported at (2023) 7 SCR 857. Coal India, a government company holding the statutory monopoly created by the Coal Mines (Nationalisation) Act, 1973, contended that the Competition Act did not apply to it. The Court rejected the contention. A government company answers the definition of a person and is therefore capable of being an enterprise; carrying on the business of mining is not a sovereign function; the express reference in section 19(4) to monopolies created by statute and to government companies and public sector undertakings shows that Parliament intended such bodies to be within the Act rather than outside it; and a State monopoly created to advance the directive principle in Article 39(b) is not, for that reason, immune. The Delhi High Court had earlier described the sovereign functions in the cognate railway litigation as the primary, inalienable and non-delegable functions of a constitutional government, a formulation that confines the exception to the core of sovereignty and leaves commercial, welfare and economic activity inside the Act. The result completes the logic of the conduct regime: a rule against anti-competitive conduct that exempted the largest incumbents in the economy would reproduce, in reverse, the distortion the licensing system created when it pre-empted capacity for favoured houses. Neutrality between public and private capital is therefore not an ornament of the settlement but one of its load bearing walls, and it is tested constantly, since the State remains the dominant firm in coal, rail transport, much of banking and insurance, and large parts of energy. The early cases fixed the perimeter before the Supreme Court settled it. In the railways matters, the Commission treated the Indian Railways, a departmental undertaking, as an enterprise in respect of its commercial operations, distinguishing the Ministry’s sovereign and policy functions from the carriage business sold to the public, and the Delhi High Court, in the appeal arising from the Arshiya matter, confined the sovereign exception to functions that are inalienable and non-delegable, rejecting the claim that freight tariffs and terminal access, being fixed by circular, stood outside the Act. In the Steel Authority information of 2009, the Commission likewise entertained a case between two public sector entities, holding that an agreement between a steel producer and the Railways could be examined under section 3 although both parties were the State in corporate or departmental form. These decisions built, brick by brick, the proposition that Coal India carried to the Supreme Court: public ownership is a fact about the defendant, not a defence, and the only activities outside the Act are those that no private person could lawfully perform at all. The neutrality has been applied in both directions across the public sector’s range. In 2015 the Commission penalised four public sector general insurance companies for rigging bids in a State government health insurance tender, treating the State’s own insurers as cartelists when they carved up a public procurement among themselves. In other matters, public sector defendants have defeated informations on the merits, dominance unproved or abuse unshown, and the register of the Commission’s orders shows government companies winning and losing on the same tests as private firms, which is the practical meaning of the doctrine: the Act’s factors in section 19(4) instruct the Commission to notice a statutory monopoly, and to decide, as it decides everywhere, on effect.

The third family: facilitation statutes

Two statutes in the field neither license entry at large nor police conduct in markets, and their presence in the map is a warning against forcing every industrial law into the entry and conduct binary. The Special Economic Zones Act, 2005 (Act 28 of 2005), in force from 10 February 2006, creates enclaves. A zone is approved by a Board of Approval in the Central Government, administered by a Development Commissioner, and treated, for authorised operations, as territory outside the customs territory of India; units inside it work under a single window clearance structure and under the fiscal concessions the Act and the taxing statutes confer. The statute controls who may develop a zone and on what conditions, so it has an approval gate, but the gate guards a status rather than an industry’s capacity: once inside, the unit’s production is not licensed product by product, and the State’s posture toward it is promotional. The Micro, Small and Medium Enterprises Development Act, 2006 (Act 27 of 2006), in force from 2 October 2006, is the clearer case. It replaced the registration logic of the small scale industries era with a classification of enterprises, micro, small and medium, by investment in plant and machinery or equipment, to which turnover was added by the revised definition notified in 2020. Classification confers status: it carries the benefits that policy attaches to the class, and the Act adds a discipline that protects the class in the market, the obligation of buyers to pay on agreed dates with compound interest on delay under sections 15 to 23, enforced through Micro and Small Enterprises Facilitation Councils. The Act does not ask whether a firm may produce. It asks how large the firm is, and it arranges the consequences.

What turns on classification as a micro, small or medium enterprise?

Classification decides whether the enterprise can claim the protections and preferences that Indian law and policy attach to smallness: the delayed payment discipline of the 2006 Act with its Facilitation Councils and compound interest on delayed dues, priority sector treatment in bank lending policy, procurement preferences for micro and small enterprises, and relief schemes drafted by reference to the class.

The classification is therefore a status with monetary consequences, which is why its thresholds, revised in 2020 to combine investment with turnover, are contested whenever they are reset.

The facilitation family’s own machinery shows the same promotional posture at work. The Facilitation Councils under the 2006 Act decide delayed payment references on a statutory timetable, the supplier’s claim carries interest at three times the rate notified by the Reserve Bank, compounded monthly, and a party challenging a Council’s award must first deposit seventy five per cent of the amount, a design that reverses the ordinary economics of delay by a large buyer. Inside the zones, the 2005 Act requires units to be net foreign exchange positive over a block of years, and gives the Act itself overriding effect within its scheme, so a zone operates as a small jurisdiction of exceptions carved out of the general law of entry and customs. Neither statute asks the planner’s question about how much of a product the economy needs, and neither asks the competition regulator’s question about effects on a market. Each instead picks out a class, a place or a scale of enterprise, and improves its terms of trade with the rest of the legal system, which is a third and distinct thing for industrial law to do, and the reason the map of this field needs three families rather than two. The family has a prehistory inside the licensing era that explains its shape. From the 1960s onward, the small scale sector was protected by the reservation of listed items for exclusive manufacture by small units, a list that grew to several hundred products at its height and shrank by dereservation across the reform decades until the reservation policy was abandoned. Small scale reservation was facilitation in its most interventionist form: it did not license the large firm out of malice toward size but fenced a garden inside the planned economy. The 2006 Act converted that inheritance into the modern form, replacing the fence with a classification and attaching payment protection and preferences to it, while the 2005 Act gave the promotional idea a territorial form in the zones, whose forerunners, the export processing zones of the 1960s and the Santa Cruz and Kandla experiments, had operated for decades under executive schemes rather than under a statute. The dereservation itself was argued out in committee: the expert committee on small enterprises chaired by Abid Hussain, reporting in 1997, recommended that reservation be phased out and replaced by support addressed to credit, technology and marketing, on the ground that the fence had kept the protected units too small to grow, and the phase out that followed across the next two decades tracked that reasoning until the list stood empty. The zones acquired their governance from the same promotional logic: proposals move from the State government to the Board of Approval, an interministerial body in the commerce ministry, and each functioning zone is run day to day by its Development Commissioner with an approval committee for unit level clearances, so the single window is an institution and not a slogan, a small state within the State whose business is to say yes within its charter. Facilitation, in short, is the oldest promotional instinct of Indian industrial policy, recast in the legal forms of the reform era: status and preference instead of reservation and licence.

The State level: the half of entry control the Centre never held

The map so far has been drawn from New Delhi, and a corrective section is required, because industrial entry in India was never the Centre’s monopoly even in the licensing decades. The States held the subjects that decide whether a licensed project becomes a factory: land and its conversion, water, power connections, factory and pollution consents, labour administration and local taxation. States legislated for their own industrial promotion through industries departments and State industrial development corporations, which acquired and developed industrial estates, allotted plots and sheds, and in several States took equity in assisted units. Entry 24 of the State List, as the constitutional section explained, preserved State competence over industries outside the Union declarations, and State legislation on industrial areas, investment promotion and, in the reform decades, single window clearance created a second, State level of entry law that liberalisation did not remove but re-purposed: where the State file once recorded compliance, it came to promise facilitation, with deemed approvals where departments miss their deadlines under the single window statutes of several States. The competition statute, by contrast, is wholly central in operation: the Commission’s jurisdiction runs across State boundaries because markets do, and a State government appears before it as an informant, a reference maker under section 21, or, through its undertakings, as a respondent enterprise. The asymmetry is a fair summary of the whole transition. Entry law federalised and softened into clearance and facilitation; conduct law centralised into a single national regulator; and the firm that once queued in two capitals for permission queues in one place for clearances and answers in one forum for its conduct. The States also keep one conduct instrument of their own that belongs on the map’s edge: procurement law. Because the State is the largest buyer in the economy, several States have enacted transparency in procurement statutes, the Karnataka Transparency in Public Procurements Act, 1999 being the earliest of the modern group, imposing open tendering, published criteria and award discipline on government purchasing within the State. These statutes are not competition law: they bind the buyer, not the market, and they are enforced through audit and administrative review rather than through a regulator. But they meet competition law at a live point, since the bid rigging that section 3(3) prohibits is usually rigged against a public buyer, and the tender conditions the procurement statutes standardise are the evidence from which the Commission’s cartel cases are built. The State as buyer thus appears in the field twice over, disciplined as purchaser by its own procurement codes and protected as victim by the conduct statute, a doubling that the licensing era, in which the State’s purchases were an extension of the plan, had no occasion to notice.

The two qualifications

The organising claim of this guide, that India replaced permission with effect, requires two qualifications, and each has been flagged as it arose. The first is that entry control survives sectorally, in two strengths. In its original strength it survives inside the 1951 Act for the five licensed heads recorded above, industries where the State still asks who proposes to produce before production begins. In its sectoral strength it survives across the regulated industries: a banking company needs a licence from the Reserve Bank under section 22 of the Banking Regulation Act, 1949; an insurer needs registration from the insurance regulator; electricity generation is delicensed but transmission, distribution and trading are licensed activities under the Electricity Act, 2003; and telecommunications entry runs through licences and authorisations administered by the Department of Telecommunications under the telegraph and telecommunications statutes. These sector regimes are not a survival of the planning logic, since they license for prudence, scarcity and technical order rather than for planned capacity, but they are entry controls in form, and a reader who treated the 1991 settlement as the abolition of entry control would misunderstand the legal position of any firm entering a regulated sector.

The second qualification cuts the other way: the conduct regime contains a pocket of prior permission at its centre, and the pocket has been enlarged. Merger control requires parties to a notifiable combination to come to the Commission before they complete, to stand still while the Commission decides, and to accept modification or prohibition of a transaction that has not yet produced any conduct in a market. It is entry control by transaction rather than by industry, justified within the regime’s own logic on the ground that a structure once created cannot readily be unscrambled, so the effect must be predicted rather than awaited. The 2023 amendment enlarged the pocket by adding the deal value threshold, capturing transactions whose targets are small in assets and turnover but large in price and strategic significance, precisely the digital acquisitions that the original thresholds let pass. A field guide should state the resulting position plainly: Indian law abolished prior permission for entering industries and for expanding undertakings, retained it for entering regulated sectors, and rebuilt it, in effects tested form, for combinations that reshape markets. The sectoral texture is worth one further paragraph, because the survival is easy to understate. A new bank, a new insurer and a new telecom operator each enter by grace of a licence or authorisation that examines the entrant’s fitness, capital and ownership before any business is done, and a distribution licensee in electricity holds an exclusive service territory in much the same administrative form as an industrial licensee once did. What has changed is the licence’s stated purpose and its reviewing discipline: prudential soundness, spectrum management and consumer protection supply the reasons, refusal must be reasoned, and the licensee’s conduct inside the market remains answerable to the competition statute once the sectoral question is settled. The deal value limb of merger control has its own texture: the substantial business operations test was given content by the combination regulations of 2024, which look to the share of users, gross merchandise value or turnover located in India, and the threshold is additional to, rather than a replacement for, the asset and turnover thresholds in section 5. The layering is visible in transactions. A merger between two banks requires the Reserve Bank’s sanction under the banking statutes and, unless an exemption notification applies, the Commission’s clearance under the combination chapter; a merger between two telecom operators requires the licensor’s approval of the licence transfer, spectrum related clearances, and the Commission’s clearance; an acquisition in insurance engages the insurance regulator’s approval of the change in shareholding pattern alongside the same competition clearance. The modern firm’s map of a large transaction is therefore a small atlas of the field this guide has drawn: sectoral entry law on one page, conduct law on the next, and the two qualifications, sectoral licensing and merger clearance, meeting on the deal itself. The reversal is real, and it is a reversal of default rather than of kind: permission became the exception that must justify itself by a predicted effect, and conduct became the rule that the State polices after the event.

Contested readings, stated in their proponents’ terms

Because this field is also an argument about economic policy, the guide records the principal positions as their proponents state them, without adopting any. The defenders of the licensing system, in government and in the planning tradition, stated their case as a case about scarcity and direction: capital, foreign exchange and entrepreneurship were scarce, left to itself the market had concentrated industry in a few regions and a few houses, and licensing, reservation and directed credit were the instruments by which a poor country could build heavy industry, spread it geographically and prevent the concentration of economic power that Article 39 of the Constitution directs the State to avoid. The internal critics of the system answered from within the record: R. K. Hazari’s inquiry reported that the licensing machinery had been pre-empted by the large houses it was meant to restrain, and the Dutt Committee concluded that licensing had in practice favoured those houses and recommended that the larger houses be confined to core and heavy industries while the public sector and the small sector took the rest, a criticism of the instrument rather than of the goal. The liberalising position, stated most completely by the High Level Committee on Competition Policy and Law chaired by S. V. S. Raghavan, which reported in 2000, held that the State should stop controlling entry and size altogether, repeal the MRTP framework, and enact a competition law addressed to conduct, because in an open economy the discipline on firms should come from markets and from a regulator policing agreements, abuse and combinations. The critics of the resulting settlement state their case in two parts: that a conduct regime policed after the event acts too late in markets that tip quickly toward a single platform, so effects testing underdeters; and that the Commission’s capacity, appointments and appellate delays leave the settlement weaker in operation than on paper. One further position should be recorded, because it comes from inside the settlement’s own review machinery. The Competition Law Review Committee of 2019, appointed to review the Act’s working, recommended among other changes the settlement and commitment mechanisms and the deal value threshold that the 2023 amendment enacted, and its report treated those tools as corrections for cases the effects test handled too slowly. The digital markets critique runs in the opposite direction: commentators who pressed for a separate ex ante code for large digital platforms, on the European model, argued that effects tested adjudication arrives after a platform market has already tipped, and the standing committee and study group reports on anti-competitive practices by big technology companies gave that argument an institutional home in Parliament’s own records. The 2023 amendment did not enact an ex ante digital code, and the debate between the two corrections, faster adjudication inside the Act against obligations imposed before conduct occurs, is the live form of the field’s oldest argument, the one between permission and effect, returning in digital dress. Each of these positions is a position about what the statutes should be, and the statutes themselves, which are the subject of this guide, can be described accurately without choosing among them.

The price thread: three statutes, three attitudes to the same number

A single thread, the State’s attitude to price, stitches the field’s eras together and shows the reversal in its purest form. Under the licensing settlement, price was an administered variable: section 18G of the 1951 Act empowered control orders over the supply, distribution and price of scheduled products, and for commodities carried through the essential commodities machinery in the cluster treated elsewhere in this series, the fair price was a figure the State computed from costs and a permitted return. The MRTP experiment took an intermediate position: price appeared in its scheme as evidence, an unreasonably high price being one of the marks of a monopolistic trade practice and price fixing the paradigm of a restrictive one, yet the Commission’s instrument was the inquiry and the report, and price control as such remained with the executive. The competition settlement completes the movement. The Act contains no power to set a price. High price enters its scheme only through the concept of abuse, as an unfair or discriminatory condition or price imposed by a dominant enterprise, or as the fruit of a cartel whose agreement is the offence; a price that is merely high, charged by a firm without dominance and without agreement, is the market’s own affair, and the Act leaves it there by design. The doctrinal distance can be measured in a sentence: the first regime asked what a price should be, the second asked who had set it and by what practice, and the third asks what the price does to competition in the market where it is charged. Administered price, investigated price and tested price mark the same passage as licence, approval and effect, and a reader tracing the field through its treatment of a single number will miss none of its turns.

Why the field coheres: the doctrines that travel

It is worth pausing on why these statutes, written across seventy years for opposite purposes, are taught and practised as one field rather than as a museum of repealed controls. The answer lies in a small set of doctrines that travel between them. The enterprise is the first: the competition statute’s definition, reaching persons, firms, associations and government departments alike, is the unit of analysis for the whole modern field, and it was framed against the older statutes’ habit of classifying undertakings by size and ownership, the habit that had exempted government undertakings from the MRTP scheme and measured MRTP jurisdiction by assets. The relevant market is the second: it replaced the scheduled industry as the frame within which power is measured, and the replacement is exact, since the First Schedule had divided the economy into listed industries for control just as market definition divides it into arenas for analysis, the difference being that the schedule was drawn by the planner in advance and the market is drawn by evidence in the case. Appreciable adverse effect is the third: a threshold of seriousness that keeps the conduct regime out of the trivial, performing the function that asset thresholds performed for the MRTP scheme, sorting the cases worth the State’s attention from those beneath it. Prior approval is the fourth, the doctrine that never left: it changed its object from capacity to combinations and its test from plan conformity to predicted effect, but its legal form, application, scrutiny, standstill, reasoned clearance, is recognisably the form the licensing directorates used. A reader who holds those four doctrines can move across the whole field without confusion, and can see each statute as a different answer compounded from the same elements: who counts as an actor, within what arena power is measured, how serious an effect the law requires, and whether the State acts before or after the event. A fifth element travels with the four, quieter than they are: the identity of the person the law is for. The licensing statutes answered in terms of the plan and the nation: the beneficiary of a capacity decision was the economy as the planner conceived it, and the disappointed applicant’s grievance was that the plan had been misapplied. The MRTP scheme answered in terms of the public interest, a phrase its gateways made the Commission construe case by case, and the complainant before it was typically a rival, a dealer or a consumer association invoking that interest. The Competition Act answers in terms that its long title fixes: competition in markets, the interests of consumers, and freedom of trade carried on by other participants. The consumer and the excluded rival stand at the centre of the modern text, and the informant who sets the Commission in motion needs no locus beyond information that a contravention has occurred, a standing the Supreme Court confirmed when it held that any person may bring information and that the proceedings are inquisitorial in character. The passage from the plan’s beneficiary, through the public interest, to the consumer and the competitor is the moral form of the same reversal the doctrines describe, and it is why the field’s modern cases so often turn on the position of the buyer at the end of the chain: the regime’s plaintiff, in spirit, is the person who pays the price the market failed to discipline.

Reading the field: sources and route

Citation practice in this field carries one trap that a reader should be warned against, because the field contains a major repealed statute whose cases still decide live questions. The MRTP Act is cited for its doctrine, its categories and its pending case transfers, and the first citation in any careful account should carry its repeal, with effect from 1 September 2009, so that no reader mistakes a description of its scheme for a statement of governing law; the same care applies to its sections 20 to 26, which were dead eighteen years before the Act itself. The 1951 Act presents the opposite trap: it is in force in full, and an account that treats it as repealed, as summaries of the liberalisation often do, will misstate the law of the five licensed industries and of the takeover chapters. The discipline is mechanical and worth the trouble: for every statute in the table, state the family, state the position in force, and only then state the doctrine, since in this field the same words, approval, practice, undertaking, mean different things in a living text, in a repealed text and in a text that lives but no longer bites. A reader working through the field should begin with the bare texts in the order of the map: the declaration and First Schedule of the 1951 Act, the repealed text of the MRTP Act with its 1991 omissions marked, and the Competition Act as amended in 2023, since the distance between the first and the third text is the field. The Commission’s orders and the appellate tribunal’s decisions are published, and the leading judgments, Steel Authority on the Commission’s inquisitorial character, Bharti Airtel on the sectoral sequence and Coal India on public sector coverage, supply the doctrinal frame. In practice these materials circulate as office files and scanned records shared between counsel, regulators and researchers, and a reader comparing versions of an order or a notification will often open them through a browser based office file viewer for working with Excel, Word and PowerPoint documents rather than in a desktop suite. The mechanics matter less than the discipline of sources: figures in this field should be traced to a named instrument, a committee report or a reported judgment, because the secondary literature reproduces the licensing era’s statistics, and the reform era’s claims about them, with very little checking in between. The committee reports named in this guide, the Monopolies Inquiry Commission of 1965, Hazari, Dutt, Sachar and Raghavan, are the primary literature of the field and repay reading in extract, since each marks a turn in what the State thought it was doing when it controlled industry. This guide is legal information about the structure of the field, not legal advice on any transaction, and a combination, licence or filing decision requires advice on its own facts. For depth, the routes are the ones signposted throughout: the IDRA pillar guide for the licensing statute, the MRTP repeal guide for the experiment and its end, the Competition Act pillar guide for the conduct statute’s provisions, the enforcement guide for the Commission at work, and the transition study for the passage between regimes.

One limit of the map should be confessed before the verdict. A map of statutes shows where power is written down, and industrial power in India has always also sat in places the statute book records imperfectly: in ministerial discretion exercised through committee rooms, in the lending decisions of public financial institutions, in procurement by a State that is the largest buyer in many markets, and in the informal guidance, moral suasion in the older vocabulary, by which regulators move firms without an order. The conduct regime disciplines the last of these least well, since its instruments are cases and its trigger is a complaint or a reference. The map is therefore a map of jurisdiction, not of influence, and the reader who needs influence should read the committee reports named in this guide alongside the statutes, for the committees were where influence described itself.

The verdict of the map can be restated in one paragraph. India’s industrial and competition law is a layered field in which a constitutional declaration device let the Centre capture industries, a licensing statute decided entry and capacity for four decades, a hybrid statute tried to control size and conduct together and lost its entry half in 1991 and its life in 2009, and a conduct statute, completed between 2009 and 2011 and widened in 2023, substituted the question of effect for the question of permission across the whole economy. What survives of the older world is specific and listable: a short licensing list under a living 1951 Act, licensed entry across the regulated sectors, and prior clearance for combinations, enlarged to catch the transactions of the digital economy. Everything else in the field, the prohibitions on agreements and abuse, the Commission and its appellate chain, the sectoral sequence worked out in Bharti Airtel, and the neutrality toward public capital settled in Coal India, belongs to the newer world and takes its logic from the market rather than from the plan.

Frequently Asked Questions

Q: Which laws regulate industry and competition in India?

The field falls into three families. Entry into industry was controlled by the Industries (Development and Regulation) Act, 1951, which remains in force with a short licensing list, supported historically by the Monopolies and Restrictive Trade Practices Act, 1969, the Capital Issues (Control) Act, 1947 and the Foreign Exchange Regulation Act, 1973, all since repealed or replaced. Conduct in markets is regulated by the Competition Act, 2002, as amended in 2023, enforced by the Competition Commission of India. Status and facilitation are handled by the Special Economic Zones Act, 2005 and the Micro, Small and Medium Enterprises Development Act, 2006, alongside the sector statutes for telecommunications, electricity, banking, insurance and securities, which license entry in their own fields.

Q: Which constitutional entry lets Parliament control industries?

Entry 52 of the Union List is the operative entry: it covers industries the control of which by the Union is declared by Parliament by law to be expedient in the public interest. Entry 7 of the same List separately covers industries declared necessary for defence or the prosecution of war. Industries otherwise sit in Entry 24 of the State List, expressly subject to Entries 7 and 52. Parliament activates Entry 52 by making the declaration inside a statute, which the Industries (Development and Regulation) Act, 1951 did in section 2 for the industries in its First Schedule. Entry 33 of the Concurrent List then supports legislation on trade, commerce, production, supply and distribution of the products of such industries.

Q: What is the difference between regulating industrial entry and regulating conduct?

Entry regulation intervenes before the firm acts: a licence, approval or consent decides whether an undertaking may be established, expanded, merged or financed, and the decision turns on the identity and size of the applicant and on conformity with a plan or policy. Conduct regulation intervenes during or after the act: the firm enters freely, and the law tests what it does, asking whether an agreement, an abuse of dominance or a combination causes an appreciable adverse effect on competition in a relevant market. The instruments differ in kind, an administrative permission against an adjudicated prohibition, and so do the forums, a ministry and its directorates against a commission, an appellate tribunal and the Supreme Court.

Q: Which industrial controls still survive?

Four survivals should be listed precisely. Industrial licensing under the Industries (Development and Regulation) Act, 1951 remains compulsory for five heads maintained by the Department for Promotion of Industry and Internal Trade: alcoholic drinks, tobacco products, electronic aerospace and defence equipment, industrial explosives, and specified hazardous chemicals. Public sector reservation survives in a small residuum centred on atomic energy and railway operations. Entry into the regulated sectors remains licensed or authorised, banking, insurance, telecommunications and parts of electricity among them. And prior clearance survives inside competition law itself, since notifiable combinations may not be completed without the Competition Commission’s approval, a control enlarged by the deal value threshold added in 2023.

Q: Who enforces competition law in India?

The Competition Commission of India enforces the Competition Act, 2002 across the whole economy. It inquires on information received, on references from governments and statutory authorities, and of its own motion; its investigative arm, the Director General, investigates where a prima facie case is found; and the Commission passes orders, including cease and desist directions and penalties, after hearing the parties. Its principal orders are appealable to the National Company Law Appellate Tribunal, which replaced the Competition Appellate Tribunal in 2017, and a further appeal lies to the Supreme Court. Sector regulators enforce their own statutes in parallel, and the courts have arranged the two jurisdictions in sequence where a case turns on a sectoral question first.

Q: How does competition law interact with sectoral regulators?

The Competition Act pulls both ways by design. Section 60 gives it effect notwithstanding anything inconsistent in any other law, while section 62 declares it to be in addition to other laws, and sections 21 and 21A create a reference machinery between the Commission and the sector regulators. The Supreme Court arranged the working rule in Competition Commission of India v. Bharti Airtel Ltd in 2018: where a competition case depends on a jurisdictional fact within the sector regulator’s province, such as interconnection obligations in telecommunications, the regulator determines that fact first and the Commission proceeds after, its jurisdiction postponed rather than ousted. The Delhi High Court applied the same logic to patents in the Ericsson litigation, holding the two statutes to operate on different planes.

Q: Which industrial statutes have been repealed?

The repeal list is shorter than the liberalisation’s reputation suggests. The Capital Issues (Control) Act, 1947 was repealed in 1992, as the securities market passed to a statutory regulator. The Foreign Exchange Regulation Act, 1973 was replaced by the Foreign Exchange Management Act, 1999. The Monopolies and Restrictive Trade Practices Act, 1969 was repealed by section 66 of the Competition Act with effect from 1 September 2009, its prior approval chapter having been deleted eighteen years earlier, in 1991. The Industries (Development and Regulation) Act, 1951 has not been repealed at all: it stands in force with its licensing list reduced by notification, which is why it belongs in accounts of the living law and not of legal history.

Q: Do competition rules apply to public sector undertakings?

Yes. Section 2(h) of the Competition Act defines an enterprise to include a person or a government department engaged in the production, supply or provision of goods and services, and a government company is a person for this purpose; the only exclusion is activity relatable to the sovereign functions of the Government, including the departments dealing with atomic energy, currency, defence and space. Section 19(4) treats a statutory monopoly or government company status as a factor in assessing dominance, not as an immunity. The Supreme Court confirmed the position in Coal India Ltd v. Competition Commission of India in 2023, holding that a State monopoly in mining is within the Act, mining being a commercial and not a sovereign activity.

Q: How does merger control qualify the claim that competition law only polices conduct after entry?

Merger control is the conduct regime’s pocket of prior permission. Parties to a combination crossing the thresholds in section 5 of the Competition Act must notify the Commission before completing, must stand still while it decides, and must accept modification or prohibition of a transaction that has produced no conduct in any market. The justification is structural: a merged entity cannot readily be unscrambled, so the effect on competition is predicted rather than awaited. The Competition (Amendment) Act, 2023 enlarged the pocket by adding a deal value threshold of two thousand crore rupees for targets with substantial business operations in India, catching acquisitions whose price betrays a strategic weight that asset and turnover thresholds miss. The regime’s default is enforcement after the event; combinations are the reasoned exception.

Q: What did the Hazari and Dutt inquiries find about industrial licensing?

Both inquiries were internal to the system and both found that the gate favoured the large. The Hazari inquiry into industrial planning and licensing policy, reporting in the late 1960s, found that large industrial houses had pre-empted licensed capacity, obtaining licences ahead of rivals and not always building on them, so licensing operated as a barrier against the entrants it was meant to order. The Industrial Licensing Policy Inquiry Committee of 1969, chaired by Subimal Dutt, widened the finding: licensing, import control and institutional finance had worked together to advantage the larger houses, and the committee recommended re-sorting industries among the public sector, the large houses, a proposed joint sector and small industry. The findings supplied the intellectual case for the MRTP Act and, a generation later, for delicensing.

Q: What was the Capital Issues (Control) Act, 1947 and why did it disappear?

The Act (Act 29 of 1947) controlled the raising of capital by companies. An issue of capital required the consent of the Controller of Capital Issues, who decided whether capital could be raised and on what terms, including the price and the premium at which shares could be offered, applying a formula that kept issue prices below what the market would have paid. It completed the entry-control system: the IDRA decided who could build, the MRTP Act who could grow, and the Controller who could finance. It disappeared in the reforms, repealed in 1992 in the same season in which the Securities and Exchange Board of India received its statutory charter, and its consent jurisdiction was replaced by disclosure based regulation, in which the State polices what an issuer tells investors rather than whether the issue may happen.

Q: Why are the SEZ and MSME statutes classed as facilitation laws rather than control laws?

Neither statute rations capacity and neither polices conduct in a market. The Special Economic Zones Act, 2005 confers a territorial and fiscal status: an approved zone is treated, for authorised operations, as outside the customs territory, its units work under a single window and fiscal concessions, and the approval gate guards the status rather than the industry’s output. The Micro, Small and Medium Enterprises Development Act, 2006 confers a classificatory status: it defines micro, small and medium enterprises by investment and turnover, attaches benefits and procurement preferences to the class, and adds a delayed payment discipline with Facilitation Councils to protect small suppliers against large buyers. Both statutes therefore decide what a firm or a place is, and arrange favourable consequences, which is facilitation rather than control.

Q: Do State Governments also control industrial entry?

Yes, at the level where entry becomes physical. Industries outside the Union declarations remain a State subject under Entry 24 of the State List, and every factory, wherever licensed, needs State level clearances: land and its conversion, water and power, factory and pollution consents, and labour administration. States legislate for industrial promotion through development corporations that build industrial estates and allot plots, and several States have single window clearance statutes that promise time bound approvals, in some cases deemed approvals on default. What the States do not have is a competition regulator: conduct in markets is policed nationally by the Competition Commission of India, before which a State government may appear as informant or referring authority. Entry law is therefore federal in operation even where its commanding statute is central.

Q: Why did the Competition Act, 2002 come into force in stages?

Section 1 of the Act allows different commencement dates for different provisions, and the government used the power to sequence a decade. The establishment provisions came first, and the Competition Commission of India was constituted on 14 October 2003, working initially on advocacy and institution building. The prohibitions on anti-competitive agreements and abuse of dominance followed on 20 May 2009, timed against the repeal of the MRTP Act that September, so that the old conduct jurisdiction was not extinguished before the new one opened. The combination chapter came last, on 1 June 2011, after the Commission had framed its combination regulations and transaction practice had a settled form to file in. Staging let the institution precede the powers, and the powers precede the merger regime that touched live transactions most closely.

Q: What does appreciable adverse effect on competition mean as the Act’s organising test?

It is the standard of harm that every operative chapter of the Competition Act shares. Agreements are prohibited where they cause or are likely to cause it (section 3), combinations are void where they cause or are likely to cause it (section 6), and abuse is assessed against the market conditions it describes. Appreciable marks a threshold of seriousness: trivial or speculative effects do not engage the Act. The effect is judged inside a relevant market, on the factors Parliament listed, entry barriers, foreclosure of rivals, driving competitors out, and, in the balance, benefits to consumers and improvements in production or distribution under section 19(3), with the dominance factors in section 19(4). For the cartel agreements listed in section 3(3), the effect is presumed and the parties must displace the presumption; elsewhere it is proved on evidence.

Q: How does ex ante licensing differ from ex post competition enforcement?

The difference is one of timing, burden and remedy. Ex ante licensing acts before the event: the applicant must satisfy the authority in advance, the authority may impose conditions shaped to the case, and supervision continues for the licence’s life; the burden of persuasion sits on the entrant, and the sanction is refusal or revocation. Ex post enforcement acts after the event: the firm needs no one’s leave, the regulator must prove a contravention and its effect in a market, and the sanctions are cease and desist orders, modification and penalties. India’s industrial law moved its centre of gravity from the first model to the second between 1991 and 2011, retaining the first model where a wrong decision is hard to reverse, in sector licensing and, within competition law itself, in the prior clearance of combinations.

Q: Is holding a dominant position by itself unlawful in India?

No. Section 4 of the Competition Act prohibits the abuse of a dominant position, not the position itself. Dominance is defined as a position of strength in a relevant market which enables the enterprise to operate independently of competitive forces, or to affect competitors, consumers or the market in its favour, and it is assessed on the factors in section 19(4), including market share, size and resources, the strength of competitors, entry barriers and countervailing buying power. Liability requires one of the listed abuses, unfair or discriminatory pricing or conditions, limiting production or technical development, denying market access, imposing supplementary obligations, or leveraging dominance in one market to enter another. Size acquired by efficiency is lawful; the Act intervenes when the position is used to exclude or exploit.

Q: What counts as a combination under the Competition Act?

Section 5 defines a combination by transaction type and size. The types are the acquisition of shares, voting rights, assets or control of an enterprise, and a merger or amalgamation of enterprises. The size gate is crossed where the parties, jointly or as a group, hold assets or turnover above the thresholds the section prescribes, tested both in India and worldwide with a minimum Indian component. A combination above the gate must be notified to the Competition Commission and cannot be completed until cleared; a combination that causes or is likely to cause an appreciable adverse effect on competition is void under section 6. The Competition (Amendment) Act, 2023 added a second size gate based on deal value, two thousand crore rupees, where the target has substantial business operations in India.

Q: What did the Sachar Committee add to the MRTP scheme?

The High Powered Expert Committee on Companies and MRTP Acts, chaired by Justice Rajinder Sachar and reporting in 1978, reviewed the working of the Monopolies and Restrictive Trade Practices Act, 1969 alongside company law. Its most durable addition to the MRTP scheme was the proposal that unfair trade practices, misleading advertising, false representations and deceptive promotions, be brought within the Act, which the amendment of 1984 enacted as a separate chapter, together with a power for the MRTP Commission to award compensation to persons who had suffered loss from an unfair or restrictive practice. The committee also pressed for fuller disclosure by companies and a stronger, more court like Commission. Its additions moved the MRTP scheme partway from an entry and concentration statute toward a consumer facing conduct law, six years before the approval scheme itself came under sentence.

Q: Can the Central Government exempt a sector or an enterprise from the Competition Act?

Yes, within limits Parliament set. Section 54 of the Competition Act empowers the Central Government, by notification, to exempt any class of enterprises, any practice or any agreement from the Act or any of its provisions, where the exemption is necessary in the interest of national security or public interest, or under an obligation of an international treaty or convention, or where the enterprise performs a sovereign function on behalf of the government. The power has been used sparingly and by class rather than by favour: amalgamations of nationalised banks are the standing example, exempted for a stated period so that public sector bank consolidation proceeds under the banking statutes alone. An exemption is therefore a reasoned, published and time bound carve out, distinct in kind from the MRTP Act’s blanket exclusion of government undertakings, which operated without notification, reasons or expiry.